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Alstom Case | The Parallel Inquiry

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Source: Instituto Ethos

The governor of São Paulo now says he will name an independent commission to “accompany” the official investigation into the Siemens-Alstom cartel scheme.

The commission — dubbed TranSParência — will include “representatives of civil society” including Transparência Brasil, the OAB — Order of Brazilian Attorneys — and the Instituto Ethos, the latter a frequently cited talking head factory on matters of corporate social responsibility.

Transparência Brasil is a Ford Foundation-funded project in partnership with the UN Development Fund.

Instituto Ethos is an outlet for corporate social reponsibility partnered with

  1. Walmart Brasil
  2. Suzano
  3. CPFL
  4. Roland Berger
  5. Vale do Rio Doce
  6. Natura
  7. Alcoa

Ethos provides a long list of institutional partners ranging from NGOs like Greenpeace and the mega-NGO GIFE — mostly corporate foundations, it shares the title of “the Brazilian NGO of Brazilian NGOs” with ABONG — to labor federations such as CUT.

Ethos is chaired by Sérgio Ephim Mindlin, a board member of the Roberto Marinho Foundation and former director of the Fundação Telefónica. The use of NGOs as sub rosa lobbying vectors makes observing governance a difficult task here in Brazil.

Given its involvement — or rather, its multiple, networked involvements on various levels — the Instituto Ethos finds it necessary to issue a note clarifying its interests in the case with respect to Siemens.

Given recent reports about an alleged cartel in the area of trains and subway lines, we wish to clarify our partnership with Siemens.

In recent weeks, the press has published a series of reports on a CADE — [antitrust authority] — investigation into a supposed cartel in various Brazilian states, involving companies such as Alstom, Bombardier, CAF, Mitsui and Siemens, among others.

The Instituto Ethos comes forth to clarify the nature of the partnership we have developed since 2010 with Siemens.

The   Siemens Integrity Initiative funded the project Jogos Limpos Dentro e Fora dos Estádios — Fair Play Both On and Off the Field.

This partnership seeks to enter into integrity agreements with corporations and transparency agreements with governments, and offers tools for collective monitoring and social control of public investments, especially those used to stage the World Cup 2014 and the 2016 Olympics.

The accounts of the Jogos Limpos are audited annually by independent consultancy BDO and are publicly availalable.

TranSParência is not even a Web site yet — good luck getting the search engine to discern transparência from tranSParência … and technically speaking, the state government already has a transparency portal of its own.

I think Ethos should recuse itself, but hey, it is not like this is an official investigation, journalistic probe or anything. It is, rather a political stacked deck. It will be interesting to see if it creates buzz. Similar campaigns in the past — Cansei! — have not worked out well for the ruling Toucans.

The takeaway: a lot of power and infuence are channeled through NGOs here in Brazil. We will soon see “independent” talking heads promoting the viewpoint of the accused in this case. How will they fare?

The game begins with a solemn and statesmanlike pronouncement by ex-President Cardoso, a bnign figure with a certain gravitas, getting a little white around the muzzle:

— From what I have seen, there is no objective [to the investigation of PSDB members and officials]: the issue is to avoid the formation of a cartel. That is the position taken by the antitrust authority, CADE — said the former president,  after an event held at the Copacabana Palace by the Rio de Janeiro medical community, early Friday. – There is no accusation that the São Paulo government was favored or that any PSDB politician was benefited. There is a lot of buzz but very little concrete information. Care should be taken.

Cardoso points to corporate governance NGOs as a useful response to the problem of corruption.

Cardoso acknowledged, however, that public auctions are not immune to corruption. To avoid such problems, he defends an increase in transparency.

“All over the world it is the same problem: There is no perfect mechanism for preventing groups from organizing in order to commit some sort of fraud. Even so, there is no getting around it, you have to hold public auctions,” he said, adding: — In these areas,there are very few companies in the world … it is difficult to distinguish, but there has to be transparency. You have to explain the facts more clearly. Serra’s latest statement was excellent, he explained things really well. Had he not, the public might conclude that it is all a bunch of flour from the same sack … But it isn’t.